Macquarie fund selling US wireless unit for $4.8bn

Macquarie Group’s unlisted American Infrastructure Fund is selling a wireless communications tower business for $US4.8 billion, six years after it paid $US1.4 billion for the investment.

Global Tower Partners will be bought by New York Stock Exchange-listed American Tower Corporation, the companies announced in the United States on Friday.

GTP has been majority owned by Macquarie Infrastructure Partners, which is part of Macquarie’s $343 billion funds group. Macquarie bought the business in 2007 with minority partners including Dutch pension fund manager PGGM.

GTP owns and operates about 5400 towers, 800 property interests under third-party communications sites, and has management rights to over 9000 domestic sites, which are mainly rooftop assets.

It also owns 500 communications sites in Costa Rica, a market into which Macquarie expanded the communications business.

Portfolio of towers more than doubled

Most of GTP’s revenue base is derived from long-term contracts with major wireless operators, including AT&T, Sprint-Nextel, T-Mobile and Verizon Wireless.

A consortium led by Macquarie Infrastructure Partners acquired the wireless tower operator business from the Blackstone Group in July 2007.

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Over the last five years the business has grown to a portfolio of about 5400 towers - from 2500 towers - in urban and suburban locations across most US states, Puerto Rico and Costa Rica.

Jim Taiclet chairman and chief executive of American Tower, said: “GTP has constructed and acquired an outstanding US portfolio of tower, rooftop and land assets, which is highly complementary to that of American Tower.

“Moreover, GTP’s management of these assets has been excellent, as confirmed through our rigorous due diligence process. GTP’s towers boast a high quality customer base, a strong position with respect to ground ownership and lease terms, and additional structural capacity available to facilitate future leasing activity."

Macquarie was not immediately available for comment.

Cash and debt deal

The purchase price is expected to be satisfied with about $US3.3 billion in cash and through taking on $US1.5 billion of existing indebtedness.

The transaction is subject to closing conditions and is expected to be completed in the fourth quarter of 2013.

Macquarie Infrastructure Partners, a diversified unlisted fund focusing on infrastructure and infrastructure-like investments in North America, was established in May 2006.

Most of its investors are North American institutions such as public pension funds, corporate pension funds, insurance companies, endowments and foundations.

American Tower was advised by Goldman Sachs and EA Markets Securities.